Student Education Loan in India - Pros and Cons

Student Education Loan in India – Pros and Cons

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Student Education Loan in India: Pros and Cons

Are you trying to decide if taking out a student education loan in India to pay for college makes sense for you? Are you wondering if the cost of an education loan is worth it in the long run? The answer to both of these questions is a big yes.

Student education loans in India are an essential part of many people’s lives. Without them, millions of students could miss out on a college education each year, making them a necessary and viable option for parents as well. If you need a student education loan in India for college, make sure to review the pros and cons first.

Let’s look at some of these benefits and downsides to help you make the decision that seems best for your own personal situation.

Education Loans Pros:

1. Student loans let you afford college

Let’s be honest here! College is so expensive that it would be nearly impossible to afford for the vast majority of Indians without the help of student education loans. I’d say that anything that allows you to pursue your dreams while also receiving a quality education can’t be all bad. 

2. You can go to your dream school

Private college costs more than double what the government university offers. Now imagine that your parents worked hard over the years to save money for your education, and they were able to save enough to cover four years at a government university. If the university offers the courses you want to take and fits into your budget, that’s fantastic: you’ll be able to graduate from college debt-free!\

But what if it has always been your dream to go to a reputed private college? You’ve been accepted, but your parents haven’t been able to save enough money to cover the entire cost. You’d be stuck as they still have to cover the cost through other means, most likely a mix of liquidated assets and education loans. You would be forced to attend the college that you could afford if you did not have access to student education loans.

Also Read: 7 advantages of taking a loan for higher education

3. Parents are relieved

It relieves parents of the financial burden of funding their child’s education. People from all walks of life can now get an educational loan irrespective of their source of income.

A cosigner is required for a student education loan in India. When you take out a student loan, your co-borrower becomes legally responsible for your debt, and their credit score improves.

4. Use loans for a variety of purposes

Many people believe that student education loan in India can only be used for tuition, room, and board. While this is true for the majority of your loan funds, you can also use them for necessary college expenses such as textbooks, a laptop, and computer software. Those are not insignificant costs. The fact that student loans can help you and your family ease the burden is a good thing. 

That being said, you should, of course, use your student education loan funds wisely. Only buy what you need for your education. No splurging! You’ll be able to take out lesser student loans if you keep your college expenses as low as possible. That means more money in your pocket.

5. Independence for you

Education loans provide you with the freedom to study and pursue your dreams, as well as to pursue higher education without financial constraints. 

The is ultimately your decision and whether or not attending the more expensive school is the better option will be determined by your personal financial situation. The fact that student education loan in India offers you the option to choose is definitely a positive.

Education Loan Cons:

1. Impossible to unburden yourself if you can’t pay

If your co-borrowers find themselves unable to pay for whatever reason, it can cause significant damage to their future borrowings. On time payment is very important. Because if they don’t, this will drastically impact their and your ability to obtain any future credit. After reviewing your credit history, future lenders will reject your application.

2. Defaulting on your student education loans can tank your credit score

What does irresponsible use of student education loans look like? Taking out more than you can afford to repay after graduation, failing to make your monthly payments on time, and defaulting on your student education loans can all have major negative consequences on your or your co-borrower’s credit score. Defaulting is the worst possible outcome because it means you were unable to repay the money you borrowed from a lender.

A poor credit score can follow you for the rest of your life, causing you to pay more for everything from credit cards to car loans to mortgages. 

Also Read: What you should know about qualifying for an education loan


3. Always overdue

If you do not pay your EMIs on time, you will be under a lot of pressure to find money so that you can pay the next few EMIs on time. Ergo, missing even one EMI payment can cause you to be perpetually late.

4. You must choose your course carefully

Obtaining a student education loan in India for courses that do not have a high employment rate is a difficult task. Therefore, banks or non-bank financial institutions (NBFCs) may deny you this loan if you seeks admission to “mere degree-granting colleges.”

5. Inability to change direction

Education loans are given to students who plan to attend specific universities. When studying on a student education loan, your options for changing universities or courses are limited. If you drop out of college or university, lenders will charge you service fees and other fees to cancel the loan.

The rising cost of higher education is not the only reason why parents may be unable to save enough money for their children’s education. A shortfall can also occur due to a change in the nature of the goal. Therefore, Varthana student education loan in India is the only way to go. Apply now to enjoy its benefits.

Advantages Of Taking An Education Loan

Taking an education loan can offer several advantages for pursuing higher studies. Firstly, it allows individuals to access funds specifically dedicated to educational expenses, covering tuition fees, books, accommodation, and other related costs. This relieves the financial burden on students and their families, enabling them to focus on academics without worrying about immediate expenses. Additionally, education loans often come with flexible repayment options, allowing borrowers to repay the loan amount over an extended period after completing their studies or securing employment. Moreover, by investing in education, individuals can enhance their skills and qualifications, increasing their employability and potential earning capacity in the future.

Disadvantages Of Taking An Education Loan

Taking out an education loan without finding a good lender and having a clear plan can cause problems. You might end up with high-interest rates and bad terms from lenders. Without a solid plan, it can be hard to pay back the loan on time, hurting your credit score. You might also borrow more than you need, making it tough to manage other expenses. So, it’s important to research lenders and make a repayment plan before getting a loan.


While student education loans in India have their pros and cons, they can be a valuable tool for achieving your educational goals. By providing financial support, education loans enable you to pursue higher studies and expand your opportunities for personal and professional growth. However, it’s essential to weigh the benefits against the potential drawbacks, such as interest rates and repayment terms, and make informed decisions accordingly. With careful planning and responsible borrowing, education loans can empower you to invest in your future and unlock new possibilities for success.


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